Federal Reserve reports slight rise in US bank loan delinquencies in 2025

US bank loan delinquencies ticked upward across multiple categories throughout 2025, according to Federal Reserve data. The total bank loan and lease delinquency rate fluctuated between 1.48% and 1.55% across the quarters of 2025. That’s still below the 10-year average of roughly 1.7%.

The numbers behind the uptick

The New York Fed’s Q4 2025 Household Debt and Credit Report, published in February 2026, put aggregate household debt delinquencies at 4.8% of outstanding balances. That’s a 0.3 percentage point jump from Q3 2025, when the figure sat at 4.5%.

Early delinquencies on mortgages and student loans drove much of the increase. Student loan delinquencies were particularly stark: 9.6% of balances were 90 or more days past due in Q4 2025, a figure that reflects the expiration of pandemic-era forbearance measures that had effectively frozen millions of borrowers’ obligations.

Residential real estate, consumer loans, and credit cards all showed minor quarterly increases throughout the year. Commercial real estate delinquencies actually declined to approximately 1.5% by Q2 2025. During the first half of 2025, total bank loan delinquency rates held near 1.5%, remaining under the 10-year average of approximately 1.7%.

What’s driving the normalization

Student loans are the clearest example. When the federal government paused repayment requirements, delinquency rates plummeted because there was nothing to be delinquent on. Once those pauses ended, borrowers had to start paying again, and a meaningful share of them couldn’t. A 9.6% serious delinquency rate isn’t surprising in that context, but it is a real number representing real financial stress for millions of households.

What this means for investors

Bank earnings could feel the pressure through higher provision expenses. When delinquencies rise, banks have to set aside more capital to cover potential losses. That directly eats into profitability, even if the losses never fully materialize.

The Fed’s own supervision reports noted no connection between these delinquency trends and cryptocurrency assets.

The divergence in borrower performance across categories also creates opportunities for those paying attention. CRE stabilization at 1.5% delinquency suggests the worst fears about commercial real estate may have been overblown, while the student loan and credit card trends suggest consumer stress is real and concentrated in specific demographics.

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